Hillicon Valley: North Korean IT firm hit with sanctions | Zuckerberg says Facebook better prepared for midterms | Big win for privacy advocates in Europe | Bezos launches $2B fund to help children, homeless

Welcome to Hillicon Valley, The Hill’s newsletter detailing all you need to know about the tech and cyber news from Capitol Hill to Silicon Valley.

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SANCTIONS ON NORTH KOREAN IT FIRM: The Treasury Department on Thursday imposed financial penalties on two information technology companies and one Chinese national with ties to North Korea for allegedly violating U.S. sanctions.

{mosads}Treasury’s Office of Foreign Asset Control (OFAC), which administers sanctions, targeted China-based Yanbian Silverstar Network Technology Co., Ltd., also known as China Silver Star, its North Korean CEO Jong Song Hwa, and its Russia-based affiliate Volasys Silver Star.

The two companies and their leader are banned from the U.S. financial system, and U.S persons and firms are prohibited from conducting businesses with them.

Treasury Secretary Steven Mnuchin said in a statement that the penalties “are intended to stop the flow of illicit revenue to North Korea from overseas information technology workers disguising their true identities and hiding behind front companies, aliases, and third-party nationals.”

The Treasury Department alleges that China Silver Star and Volasys Silver Star are run and staffed by North Korean executives and employees, with revenue going to the North Korean regime. The companies and their executives are accused of violating sanctions banning the exportation of North Korean workers and operating information technology services in North Korea. 

Read more here.

 

MARK ZUCKERBERG, ELECTION PREPPER: Facebook CEO Mark Zuckerberg said on Thursday that the social network is better equipped to fight potential interference efforts ahead of this year’s midterm elections than it was in 2016.

“In 2016, our election security efforts prepared us for traditional cyberattacks like phishing, malware, and hacking,” he wrote in a blog post. “We identified those and notified the government and those affected. What we didn’t expect were foreign actors launching coordinated information operations with networks of fake accounts spreading division and misinformation.”

“Today, Facebook is better prepared for these kinds of attacks,” he continued.

In the lengthy note to users, Zuckerberg outlined the steps Facebook has taken since the 2016 election to combat misinformation and promote transparency in its advertising practices. He also said that the company has stepped up its cooperation with governments to identify potential threats. 

Read more here.

 

DOES THIS MEAN THE CHILD IS ALWAYS RIGHT? Amazon CEO Jeff Bezos on Wednesday announced a $2 billion philanthropic fund to finance a new network of preschools and contribute to nonprofits assisting homeless families.

Bezos said on Twitter that the schools would be located in underserved communities and would be operated by his new Bezos Day One Fund.

“We’ll use the same set of principles that have driven Amazon,” he said in his statement. “Most important among those will be genuine, intense customer obsession. The child will be the customer.”

Bezos, who Forbes estimates is worth $163 billion, is the wealthiest person in modern history. The announcement comes as the Amazon founder is visiting the capital for a speech at The Economic Club of Washington on Thursday.

He and his wife, MacKenzie, recently made their first major political donation, giving $10 million to a super PAC dedicated to helping veterans in both parties get elected to Congress. 

Read more here.

 

NOT THE (SEARCH) RESULTS THEY WERE LOOKING FOR: Google executives and employees can be seen making disparaging comments about President Trump’s 2016 election victory in a leaked video recorded shortly after Trump’s win.

The video of Google’s all-hands staff meeting following the election, which was provided anonymously to right-wing news site Breitbart News, shows executives including co-founder Sergey Brin comparing Trump voters to “extremists” and authoritarian movements.

In the hour of video footage, Brin is shown saying he is “deeply offend[ed]” by Trump’s election due to his status as an immigrant, and added that Trump’s politics conflict “with many of [Google’s] values.”

“Most people here are pretty upset and pretty sad,” Brin says near the beginning of the meeting.

Google’s senior VP for global affairs Kent Walker went on to characterize Trump voters as governed by “fear,” which he said was “fueling concerns, xenophobia, hatred, and a desire for answers that may or may not be there.”

Google released a statement Thursday denying that the video obtained by Breitbart showed any instances of such bias being written in to Google’s platform.

“At a regularly scheduled all hands meeting, some Google employees and executives expressed their own personal views in the aftermath of a long and divisive election season,” the statement to Breitbart reads.

“Nothing was said at that meeting, or any other meeting, to suggest that any political bias ever influences the way we build or operate our products,” a spokesperson added. 

Read more here.

 

THE CYBER APPRENTICE: Rep. Jacky Rosen (D-Nev.) on Thursday unveiled legislation to create a Department of Labor grant program for apprenticeships in cybersecurity.

The bipartisan bill, known as the “Cyber Ready Workforce Act,” would establish grants to help create, implement and expand registered apprenticeship programs for cybersecurity.

Under the bill, the programs would be required to offer certain cybersecurity certifications and help connect participants with local businesses or other entities for apprenticeships in hopes to boost the number of qualified workers for federal cyber jobs.

“The demand for talent in cybersecurity is sky-high, and we’re putting ourselves at risk if we don’t address this shortage in our workforce,” Rosen said in a statement Thursday. “I’m committed to ensuring that businesses and government have the skilled people and critical tools they need to enhance our nation’s cybersecurity infrastructure, help industry thrive, and strengthen our national security.”

Reps. Seth Moulton (D-Mass.), Elise Stefanik (R-N.Y.) and Dan Donovan (R-N.Y.) have all signed on as cosponsors to the legislation. 

Rosen is challenging against Sen. Dean Heller (R-Nev.) in the midterms.

Read more here.

 

CYBER’S HOTTEST CLUB IS TRENCH-WARFARE: The Senate Homeland Security and Governmental Committee hosted a hearing Thursday on evolving threats to the U.S., touching on a number of cybersecurity issues.

Sen. Claire McCaskill (D-Mo.), the top Democrat on the panel, said in her opening statement that federal government needed to step up its oversight on supply chain risks.

“This evolving threat can turn a mundane anti-virus software pitch into an unacceptable risk to national security,” McCaskill said. “We need to make sure our information technology services are safe from infiltration, down from the smallest component and like most national security issues that requires a strategy and a whole of government approach.”

The experts testifying at the hearing also offered warnings on cyber threats: Kevin Mandia, the CEO of FireEye, said that he believes the U.S. is “likely to face an enduring, more protracted cyber campaign akin to ‘cyber trench-warfare.'”

According to Mandia, “cyber trench warfare” is more likely to go after everyday Americans and businesses rather than high profile military or infrastructure targets.

“These softer targets, such as individuals, state and local governments, public schools, academia, smaller businesses, form the fabric of our daily lives,” he said. “Not every company or organization has the resources or capabilities to defend itself in cyberspace, and a catastrophic or even gradual failure of the softer targets will result in significant impact perhaps as grave as attacks against well protected, critical systems.”

Mandia called for the U.S. government to thwart cyberattacks by “promoting a system that fosters actionable and timely information sharing, supports the practice of resiliency in businesses, secures the supply chain, and identifies and holds perpetrators of cyber-crime or cyber trenchwarfare accountable.”

You can watch the hearing here.

 

MAJOR WIN FOR PRIVACY ADVOCATES: The European Court of Human Rights (ECHR) ruled Thursday that British intelligence’s mass surveillance of private communications online is illegal.

The Guardian reported that the court found the Government Communications Headquarters (GCHQ) had failed to put safeguards in place while surveilling the digital communications, violating Article 8 of the European convention on human rights.

However, the ECHR ruled that the processes used to share the intelligence with foreign governments was not in violation of privacy or human rights standards.

The Guardian noted that the ruling is the first major legal blow to U.K. intelligence’s bulk interception and surveillance of private messages.

Former National Security Agency contractor Edward Snowden first disclosed the practice in 2013, revealing that GCHQ had been intercepting and holding onto data about the private communications of millions of people. 

Read more here.

 

LAWMAKERS WANT DEEP TAKES ON DEEP FAKES: A bipartisan group of House lawmakers are calling on the top U.S. intelligence official to assess the national security threats posed by doctored videos, warning that the manipulated materials could be used as a weapon against the U.S. by a hostile foreign nation.

The lawmakers sent a letter to Director of National Intelligence Dan Coats on Thursday asking him to have the intelligence community examine the risks posed by “deep fake technology” to be examined and what potential damage could be incurred by such disinformation.

“By blurring the line between fact and fiction, deep fake technology could undermine public trust in recorded images and videos as objective depictions of reality,” House Intelligence Committee ranking member Adam Schiff (D-Calif.), Rep. Stephanie Murphy (D-Fla.) and Rep. Carlos Curbelo (R-Fla.) wrote.

“As deep fake technology becomes more advanced and more accessible, it could pose a threat to United States public discourse and national security, with broad and concerning implications for offensive active measures campaigns targeting the United States,” they added.

The threat of doctored videos purporting to be real news clips drew national attention earlier this year after comedian Jordan Peele and BuzzFeed released a viral video that turned out to be a ruse. The video was manipulated to show former President Obama stating a number of controversial comments, but it was actually Peele speaking. Read more here.

This isn’t the first time: This issue hasn’t been getting a lot of attention, but Congress has been keeping an eye on it. In February, Sens. Mark Warner (D-Va.) and Ron Wyden (D-Ore.) said that they’re concerned with this. This is only the tip of the iceberg. The implications of deepfakes are going to be huge and Congress will get more involved. 

 

WE HAVE THE VOTES, BUT NOT THE BILL: The top Democrat on the Senate Intelligence Committee, Sen. Mark Warner (Va.), said that he believes many Republicans would be willing to help pass digital privacy regulations for consumers.

“Depending on how we framed it, I think we’d have an overwhelming majority [of Republicans],” Warner said on Thursday during a discussion on internet privacy at an event sponsored by The Atlantic.

“I think there is a high chance that people realize that the days of the wild, wild west are over that there needs to be some guardrails. We need to do this in a thoughtful forward-leaning way,” he continued.
Warner cautioned on taking the regulations as far as Europe, which is known for having some of most stringent in the world in terms of consumer protection, but said American legislation could take the best aspects of European rules.

Read more here.

 

A LIGHTER TWITTER CLICK: Ric Flair is unstoppable.

 

NOTABLE LINKS FROM AROUND THE WEB:

Top House Intel Dem says he’ll investigate Trump money laundering allegations if House flips. (The Hill)

Declassified report describes confusion around military cyber responsibilities in 2014. (NextGov)

California bill regulates Internet of Things for first time in US. (Naked Security)

Elon Musk said a Tesla could drive itself across the country by 2018. One just crashed backing out of a garage. (Washington Post)

Where in the world is Larry Page? (Bloomberg)